My "Colossal Slothfulness and Lack of Intellectual Capacity"

When I documented Jim Cramer's mediocre returns in my syndicated column back in 2006, along with the fact that Cramer's organization, TheStreet.com failed to return my phone calls seeking audited performance numbers to prove his boastful claims for his now closed hedge fund, Cramer sent me a nasty-gram and copied the top brass at CNBC on the missive as well. In the e-mail he said:

"Your hilariously scatological take on me and my performance is only outdone by your colossal slothfulness and lack of intellectual capacity. I make all numbers available, in an audited fashion, to EVERY news entity that contacts me, in fact to every person that contacts me. Alas, though, you have to contact me, to get them. You can't pull them out of the ether."

My Response

I responded to Cramer's email and copied the same people he had on his original e-mail message to me. I said in my message that I had contacted the media relations person at thestreet.com twice and got no return call. And, I waited an entire week before running the column. I also pointed out that I had made a similar contact and request back in the 1990s and was also ignored (at that time I contacted his hedge fund numerous times after the SmartMoney article ran). I noted that the SmartMoney article "performance numbers" had apparently not been audited, which I found troubling.

Regarding Cramer's claim that he provided audited numbers to every news organization that requests them, I said,

"...since I now have your attention, I am hereby requesting them...Also, since I have never seen your ‘audited' numbers published anywhere in the news media, could you please also cite those places where those audited numbers have been published?"

I never got the numbers, or any further response for that matter.

The Truth About Jim Cramer's Claimed Returns

When I was giving a talk at Yale University soon after this exchange with Cramer, in the question and answer period following my speech, a woman asked me what I thought of Cramer and his stock picking advice. I then recounted my story including my email exchange. I then asked the audience, which included students and faculty, what they thought of it all. A young man said, "Clearly, Cramer doesn't have documentation for audited returns. It has never appeared anywhere and he refused to send them to you after claiming to send them to anyone who asks."

Bingo.

So, beware of prognosticators claiming market beating returns who have no proof of their supposed superior performance. Ignore predictions - unless you know the maker's track record and it's worthy of your respect!

Unfortunately, the news media has no shortage of nicely dressed, articulate lads and ladies willing to spout off and make predictions - that's how Cramer got his regular gig - he used to be a guest on CNBC and never was shy about his stock picking opinions. The public fascination with talking heads is what gets the talking heads on the air, and it gets enough viewers to stay tuned in. (Rex Sinquefield of DFA refers to this as "financial pornography.") But in the months and years down the road, few will remember who predicted what. There's little if any accountability, and that's the beauty of the game for the market gurus - especially when they can falsely claim excellent returns.

Eric Tyson is the only best-selling personal finance author who has an extensive background as an hourly-based financial advisor and who does not accept speaking fees, endorsement deals or fees of any type from companies in the financial services industry or product or service providers recommended in his articles, books and his publications.